Senate
24 August 1955

21st Parliament · 1st Session

  1. Senate
  2. 21st Parliament
  3. 1955

The Pkesident (Senator the Hon. A. M. McMullin) took the chair at 3 p.m., and read prayers.

page 1

DEATH OF EX-SENATOR SIR THOMAS WILLIAM GLASGOW, K.C.B., C.M.G., D.S.O., V.D

Senator O’SULLIVAN:
Minister for Trade and Customs · QueenslandMinister for Trade and Customs · LP

-by leave - I regret to announce to the Senate that Major-General the Honorable Sir Thomas William Glasgow, K.C.B., C.M.G., D.S.O., V.D., a former senator, died on the 4th July after three weeks in hospital in Brisbane, at the age of 79.

Sir William was a soldier, politician and diplomat. He fought in the Boer War as a lieutenant, wherehe won a Distinguished Service Order and the Queen’s Medal. He left Australia with the rank of major with the First Australian Imperial Force, and was wounded at Gallipoli. He was honoured with a C.M.G. in 1916, and by the end of the war had risen to the rank of major-general, had been made a Commander of the Order of the Bath, and had received a Legion of Honour and a Croix de Guerre. He was mentioned in despatches for gallantry eight times. In 1919 he was made Knight Commander of the Order of the Bath.

Sir William was elected to the Senate in 1920. In 1926, he became Minister for Home and Territories in the BrucePage Government, and from 1927 to 1929 he was Minister for Defence. He was a member of the Select Committees on the claims of Captain J. Strasburg for war gratuity in 1922, and on the case of Warrant Officer Allen in 1923. He was a temporary Chairman of Committees from January to June, 1926. In 1928, Sir William was leader of the Commonwealth delegation of the Empire Parliamentary Association which visited Canada, and in 1930, Chairman of the Select Committee on the Central Reserve Bank Bill. He retired from the Senate in 1932 on the expiration of his term of office, after twelve years as a very active member of this chamber. In December, 1939, Sir William was appointed the first Australian High Commissioner in Canada, which post he held until 1945.

Sir William Glasgow was a brilliant soldier; he was a competent Commonwealth Minister and an active senator, and he had the honour of being the first

Australian High Commissioner in Canada, which post he held with distinction. In all, he was truly a remarkable man to distinguish himself in these three fields. His memory will enjoy a cherished, an honoured and an abiding place in the hearts of his grateful and admiring countrymen.

I move -

That the Senate expresses its deep regret at the death of Major-General the Honorable Sir Thomas William Glasgow, K.C.B., C.M.G., D.S.O., V.D., former Commonwealth Minister and senator for the State of Queensland, places on record its appreciation of his long and meritorious public service and tenders its sincere sympathy to his widow and the members of his family in their bereavement.

Senator McKENNA:
Leader of the Opposition · Tasmania

– The record of former Senator Major-General Sir Thomas William Glasgow, read by the Leader of the Opposition (Senator O’sullivan), is a most imposing one. He was a man who served in many fields. Not only in the Senate, but in other fields also he had the distinction of winning through to the top flight. In the parliamentary sphere he became a Minister, holding the important posts of Minister for Home and Territories and Minister for Defence. Similar success attended him in his career in the Army for there, too, he reached a high position because of his high qualities of mind and character. Finally, he acquitted himself with very great distinction in the diplomatic capacity of High Commissioner for Canada. I, personally, did not have the pleasure of knowing him, but I do know his record quite well, and I believe that the Leader of the Government in the Senate has done ample justice to it in the course of the comments that he has made. I support the terms of the motion, and all my colleagues join with me in conveying our sympathy to the relatives who survive the deceased.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– The members of the Austraiian Country party would like to associate themselves with the motion before the Senate, and to express their deep regret at the death of the late General Sir William Glasgow. I became acquainted with the late general during the years of World War I. - first of all at

Gallipoli, and later in France. A brother of the late general served in France with the same unit as myself. General Glasgow arrived at Gallipoli as second in command of the 2nd Light Horse, and left the peninsula as Lieutenant-Colonel in command of the regiment. Most honorable senators are aware of the subsequent distinguished service he rendered in World War I., where he rose to the rank of general, and commanded the 13 th Infantry Brigade. He was honoured by King George V. by being made Commander of the Order of St. Michael and St. George. One of the most outstanding achievements during the period he was in command of this brigade was the capture of Villers Brettoneux. On that occasion his brigade, together with the brigade commanded by the late General Pompey Elliott, also a former honorable senator, encircled the town and caused its capture. This feat was described by the late General Monash as the turning point in the war.

The late Sir William Glasgow never forgot his old war-time comrades. In fact, for many years he was a familiar figure at the head of the march of exservice men and women on Anzac Day, in Brisbane. As already indicated by the Leader of the Government and the Leader of the Opposition, he was a man of outstanding integrity, and one who will always be remembered as one of Australia’s greatest citizens. My political remembrance of the late senator is of a very friendly nature, as he was particularly helpful to me when I entered the Senate as a new member in 1928. It is my privilege to support the resolution and, on behalf of the members of the Australian Country party, to express our sincere condolences to Lady Glasgow and members of the late senator’s family.

Question resolved in the affirmative, honorable senators standing in their places.

page 2

DEATH OF EX-SENATOR THE HONORABLE JOSEPH SILVER COLLINGS

Senator O’SULLIVAN:
QueenslandMinister for Trade and Customs · LP

– by leave - Honorable senators will have heard with deep regret of the death of the Honorable Joseph Silver Collings, a former senator who died at his home in Brighton, Queensland, on the 20th June last at the age of 90 years. Thelate senator was associated with politics for a great many years. For fourteen years he was State organizer of the Australian Labour party. He was a member of the Queensland Legislative Council for two years from 1920, and in 1931 was elected to the Senate. He became Leader of the Opposition in this chamber in 1935, which office he held until 1941. He was a member of the Senate Standing Committee on Regulations and Ordinances from 1935 to 1937. He was Leader of the Government in the Senate from 3941 to 1943, Minister of the Interior from 1941 to 1945 and Minister in charge of the Allied Works Council from 1942 to 1945. He was Vice-President of the Executive Council from July, 1945, to November, 1946. He was President of the River Murray Commission from 1941 to 1945, and Chairman of the Board of Management of the Australian War Memorial during that period. In 1946 he led the Australian delegation to the International Labour Conference on Social Services in Canada.

He retired from politics at the expiration of his term of office in 1950, as. he did not nominate at the general elections held in 1949. I knew the late Joseph Silver Collings from my boyhood. He was always a capable and tireless worker in any cause which he espoused. Those who knew him in the Senate - and I am one of them - will remember him as an eloquent, vigorous and versatile debater. I move -

That the Senate expresses its deep regret at the death of the Honorable Joseph Silver Collings, a former Commonwealth Minister and senator for the State of Queensland, places on record its appreciation of his long and meritorious public service and tenders its sincere sympathy to the members of his family in their bereavement.

Senator McKENNA:
Leader of the Opposition · Tasmania

I second the motion on behalf of the Opposition. I think I may correctly say that no more picturesque figure and personality ever came out of Queensland into this Parliament than Joseph Silver Collings. He was an extraordinary man with the most amazing strength of mind and body. His passing at the ripe old age of 90 brought to a conclusion a full, complete and very active life. It is consoling to know that he maintained his faculties right up to the end along with that indomitable spirit that marked the whole of his behaviour.

He served the cause of Labour loyally and well throughout his long association with it, and those of us who knew him well, as many of us did, will miss his presence in the Australian community. He was an influence for good in the party and in the nation. He will be long remembered by all of us of the Opposition. I and my colleagues join with the Minister for Trade and Customs (Senator O’sullivan) in paying tribute to his magnificent community work, and also in expressing regret at his passing. We join, too, with him in conveying to the surviving relatives of Joseph Silver Collings our deep sympathy with them in their sad loss.

Senator COOPER:
Minister for Repatriation · Queensland · CP

– I desire to add a few words in support of this motion as I have known the late senator for a great number of years. In fact the late senator entered the Senate in 1932 following the defeat of the then Senate team of which I was a member. He was always a man of outstanding and vital personality, with strong views, and one who observed very high standards. I should say he was a man who held the strongest views on the ideals of the Labour party and who never wavered in those views and in his effort to implement Labour policy. Although we were on different sides of politics and had different political views, we were always the best of friends and I had the very greatest esteem for the late Senator Collings. I should like to express my sincere condolence to his daughter, Miss Collings, and to the other members of his family.

Senator TANGNEY:
Western Australia

– I should like to be associated with this motion of condolence, and to pay a personal tribute to the memory of the late Senator Collings. When I first came to the Senate in 1943 Senator Collings showed me many acts of kindness and helped me to break through the new ground as the Senate then was for a woman. He extended many privileges to me as a new member of this chamber.

Although, he himself did not have a university education, one of the proudest moments of his parliamentary career was when he piloted through the Senate the bill which provided for the establishment of the Australian National University. That measure will remain one of the memorials to his memory.

I am sure that all of us who had dealing with the late senator during his time in the Senate will not fail to remember his courtesy and charm both inside and outside the House, whilst, at the same time, we admired the vigour with which he pursued any objective, or ideal, he had in mind. I feel his passing as the loss of a personal friend, and I am sure that a similar feeling is uppermost in the minds of all honorable senators. I join the leaders of the political parties in this chamber in their expression of regret at his passing, and extend my sympathy to Miss Collings and other members of the family to whom he was so deeply attached.

Question resolved in the affirmative, honorable senators standing in their places.

page 4

JUDICIARY BILL 1955

Message received from the House of Representatives, intimating that it had agreed to the amendment made by the Senate in this bill.

page 4

AUSTRALIAN CAPITAL . TERRITORY SUPREME COURT BILL 1955

Message received from the House of Representatives, intimating that it had agreed to the amendment made by the Senate in this bill.

page 4

ASSENT TO BILLS

Assent to the following bills reported : -

Appropriation Bill (No. 2) 1954-55.

Appropriation (Works and Services) Bill (No. 2) 1954-55.

Australian Capital Territory Supreme Court Bill 1955.

Cocos (Keeling) Islands Bill 1955.

Courts-Martial Appeals Bill 1955.

Defence Forces Retirement Benefits Bill 1955.

JudgesRemuneration Bill 1955.

Judiciary Bill 1955.

Marriage (Overseas) Bill 1955.

Matrimonial Causes Bill 1955.

Meat Agreement (Deficiency Payments) Bill 1955.

Meat Export (Additional Charge) Bill 1955.

Parliamentary Retiring Allowances Bill 1955.

Salaries Adjustment Bill 1955.

States Grants (Universities) Bill 1955.

Superannuation Bill 1955.

Supplementary Appropriation Bill 1953-54.

Supplementary Appropriation (Worksand Services) Bill 1953-54.

Supply Bill (No. 1) 1955-56.

Supply (Works and Services) Bill (No. 1) 1955-50.

Trade Marks Bill 1955.

page 4

DEATH OF EX-SENATOR THE HONORABLE WILLIAM GERRAND GIBSON

The PRESIDENT:

– I have to inform the Senate that I have received a letter from the family of the late Mr. W. G. Gibson expressing thanks for the resolution of sympathy passed by the Senate on the occasion of Mr. Gibson’s death.

page 4

OFFICERS OF THE SENATE

The PRESIDENT:

– I wish to advise the Senate that, following the retirement of Mr. J. E. Edwards, Clerk of the Senate, Mr. R. H. C. Loof has been appointed Clerk of the Senate, and Mr. J. R. Odgers has been appointed ClerkAssistant.

page 4

QUESTION

ANTI-COMMUNIST LABOUR PARTY

Senator COLE:
Tasmania

– by leave - I desire to inform the Senate that henceforth I shall represent in this chamber the Anti-Communist Australian Labour party led by Mr. Joshua, M.P., who is the leader of the party in another place. I regret that, through certain circumstances, I am forced to sever political associations with honorable senators on this side of the chamber, although many of them think and feel along the same lines as myself. They find it more politic, or perhaps better tactics, to remain and fight within the Labour party. I have joined with the other members of this Parliament who refused to accept the leadership of Dr. Evatt and the pro-Communist policies laid down by an unconstitutional rump conference held at Hobart earlier this year.

Senator O’Byrne:

– The honorable senator will become known as Senator Maria.

Senator COLE:

– I can tell the honorable senator what he will he known as.

Senator Hendrickson:

– Who told the honorable senator that other senators on this side of the chamber thought along the same lines as he did ?

Senator COLE:

– I did not say that. I said-

Senator Hendrickson:

– Yes, the honorable senator did, and he said that they stayed here.

Senator COLE:

– I said that an attempt had been made to force the decisions of that conference on labour men and women throughout Australia by an unparalleled campaign of intimidation and misrepresentation.

SenatorO’Byrne. - Why does not the honorable senator go back to Tasmania and stand before his judges?

Senator COLE:

– This has been combined with a very flagrant disregard, not only of the rules of the party, but of elementary justice. In my own case, all I sought was the justice that the Evatt party vociferously demands on every occasion for the Communist party.

Senator Hendrickson:

– The honorable senator was kicked out of the party.

Senator COLE:

– Just stop-

The PRESIDENT:

– Order !

Senator Hendrickson:

– The honorable senator was booted out.

Senator COLE:

– The chicanery that was practised is well known. Dr. Evatt ordered the federal executive to move into Victoria, and there they tore up the rule book and allowed Communists and Communist supporters to direct the policy of the Labour party in Victoria.

Senator Sandford:

– Now the honorable senator has torn up his reputation.

Senator COLE:

– Not necessarily.

The PRESIDENT:

– Order !

Senator COLE:

– As regards my own case, it came to a head, of course, in the Hobart conference, where not only I, but sixteen other delegates from practically every State in Australia, did certain things in order to stand up for the justice that they expected. People know what happened in Hobart, where the federal executive tried to take, and did take, from the hands of the federal conference its right to determine its own policy. We decided that we could not entertain such flagrant injustice, and we refused to attend. I was one of those who refused. I do not know why, but I was chosen to receive the axe. I wonder why. At that conference we saw members representing Victoria afraid of the outcome of the conference. They did not think that theywould have the numbers if they did not force the issue of allowing what was known as the new Victorian delegation to enter that conference. So they did everything possible. They could not follow past precedent and allow the other five States to determine who should represent Victoria at that conference. In fact, they locked the doors and refused to permit delegates to enter the conference. They were afraid. It amused me to see some of the delegates cringing back in the corners, because they were afraid some physical force might be used. The person who would have exerted the physical force was Fred Riley, from Victoria. He is the man who stood up and said, “ If anybody is going to enter that conference, I am going to be the one “. He is over 70 years of age, but he has always shown “ guts “ throughout his political career. He was one of the men who chained themselves to the post, so that they could say their piece and not be taken away. He was the man who was going to exert all the physical force of which some of the members of the Victorian delegation were afraid.

So I took that stand in Tasmania, for justice, knowing full well that there was a Tasmanian conference to he held within the next week, at which I could be judged. I went along to that conference. What was the result? For the next federal conference, in respect of which an election took place, I received the highest vote of any person at the conference, including the then federal president of the Australian Labour party.

Senator O’Byrne:

– Well stacked, old boy!

Senator COLE:

– I know where the stacking came from. The honorable senator was one of those responsible for it. His idea was to run about the night before and see that the stacking was done. As I have said, I topped the poll. Then they said, “That was under the Hare-Clank system, under which you do not have to get a full majority”. They come along and say, “ You were not given a complete majority from the conference itself “, but they forget that, after the election, the adoption of the report of the election is brought before conference. If conference did not wish me, unless I got a majority of votes, to be on the federal conference, it could have moved that I be not allowed on the federal conference. That was not done. The motion for the adoption of the election report was carried unanimously. “We come now to the events that happened later. The Tasmanian executive, of which I was an elected member, waited until after the Victorian election. They did not hold a meeting of the executive after the conference itself, as any reasonable body would have done, but waited for nearly two months, until after the Victorian election.

Senator Hendrickson:

– They were just getting the honorable senator fat to kill him.

Senator COLE:

– That would not be necessary in the case of the honorable senator who has interjected. Then they moved in and, for certain reasons, broke the rules of their own conference and overrode the decisions of the Tasmanian conference, the result being that they suspended me. They were not game to come straight out and expel me. Instead, they suspended me, with the idea that I would remain quiet and not say or do anything until the next State conference; otherwise I would be expelled automatically at the next State conference. Since I am not easily intimidated, I would not accept that. Consequently, I will express my views in this chamber concerning the pro-Communist attitude of the Evatt group within the party. It is now obvious that there have infiltrated the Labour party a number of believers in Marxism and Leninism - those philosophies which are fostering class hatred - and these people must be removed from the Labour party before it will gain the confidence of the Australian people. The Labour party should be governing Australia because its policy is most closely related to the every-day needs of the people. “While there is suspicion, how ever, attaching to’ even the highest officials of the party, Labour has no chance of gaining these government benches, which its representatives should rightly occupy.

The group I represent belongs to the Australian Labour party, but we have designated ourselves the anti-Communist section. Dr. Evatt, the present leader of the party - or of what I will call the Evatt section - has, for a considerable time, been following a policy of assistance and support of Communists both inside Australia and abroad. My section will continue the struggle for social justice as the party has always done, but it will try to protect the trade unions and other free institutions from the subversion of communism. We will also alert the nation to the Evatt-Burton proCommunist policy, especially in the face of the perilous situation in South-East Asia.

I have certain principles to uphold, and I shall not deviate from them either in the party or in this chamber. I will endeavour always to give a true indication of Labour policy. One system that Labour does not - or should not - stand for, is co-existence with Communist principles. That is one of the planks of the Australian Labour party, but it is being flouted in Victoria at the present time, as is shown by the fact that the Cain Labour party and the Communists have a unity ticket in connexion with the ballot for election of officers of the Australian Railways Union. Honorable senators will see in that example that there is co-existence between those two parties. While such a state of affairs exists we cannot expect the Labour party to be strong, or to command the respect and confidence of the people. The position is much the same in Tasmania. In the district in which I live - I refer to the electorate of Braddon, which was formerly Darwin - there is no confidence in the Labour party. That is shown by the fact that at the last election the party lost the seat by 300 votes and also by the fact that no Labour candidate has yet been found willing to stand for the seat at the forthcoming election.

Senator Hendrickson:

– The honorable senator will meet the same fate as befell Mr. Barry in Victoria.

Senator COLE:

– I repeat that the people of Tasmania have no confidence in the Labour party under present conditions. I suppose efforts will be made to secure a candidate for the Braddon electorate, but there will have to be some running around if one is to be found. My task in this chamber will be to put forward the ideals to which I have referred, and I hope that my colleagues from Tasmania will take heed of what has happened in New South Wales. That State has pointed the way for honorable senators to follow, and I hope that they will follow the lead that has been given. I hope, too, that that lead will be followed in all the States, because until Labour gets rid of the pernicious influence in its ranks the party will never have a chance to become the government of Australia. Labour’s proper place is on the government bench, but unless it gets rid of the causes of suspicion and lack of confidence in it on the part of the people it will remain on the outer too long for the welfare of Australia.

page 7

QUESTION

TRANS-AUSTRALIA AIRLINES FLIGHT SCHEDULES

Senator CRITCHLEY:
SOUTH AUSTRALIA

– Is the Minister aware that there is no Trans- Australia Airlines aircraft leaving Adelaide for Melbourne between 7.10 a.m. and 3.45 p.m. daily, and that the absence of such a service is the cause of serious inconvenience to business people and others? Is he also aware that instead of four Trans-Australia Airlines planes daily from Adelaide to Melbourne, there are now only three, leaving 7.10 a.m., 3.45 p.m., and 6,55 p.m., except on Fridays and Sundays when an additional plane, which leaves at 5.30 p.m. and carries passengers but mainly freight, is returning to Melbourne after having been engaged on the Darwin and Perth runs respectively? Will the Minister seek an assurance that when Trans- Australia Airlines next revises its schedules provision will be made for the inclusion of a 9.30 a.m. aircraft - Flight 505 - from Adelaide to Melbourne, as in the year 1951?

Senator McLEAY:
Minister for Shipping and Transport · SOUTH AUSTRALIA · LP

– I shall be pleased to bring the matter raised by the honorable senator to the notice of the Minister for Civil Aviation, and to obtain a reply as soon as possible.

page 7

QUESTION

BASS STRAIT PASSENGER SERVICE

Senator GUY:
TASMANIA

– Is the Minister for Shipping and Transport in a position to make a statement concerning his very commendable proposal to modernize the sea-going Bass Strait passenger service? Will the design of the proposed new vessel provide facilities for the “ driveondriveoff” method for motor vehicles? Will provision also be made for cabin accommodation for all passengers? Does the Minister propose to set up a committee of those directly interested and of those who use the service to consider the design of the new vessel ?

Senator McLEAY:
LP

– Considerable attention has already been given to this problem. I have had an opportunity to see the plans for the proposed vessel, but I cannot say offhand the number of passengers that will be carried, or the nature of the accommodation that will be provided for them, or other details desired by the honorable senator. I have already conferred with the harbour authorities in Tasmania in regard to certain aspects of this service, and have also been in consultation with technical officers on the subject. The question of appointing a committee is under consideration. I shall be pleased to give honorable senators from Tasmania any information and details that I can, because I am sure that when they see the plans and specifications of the proposed vessel they will appreciate that a step forward is being taken. If the honorable senator will place his question on the notice-paper I shall see that details are supplied to him.

page 7

QUESTION

TARIFF BOARD

Senator WEDGWOOD:
VICTORIA

– Is the Minister for Trade and Customs aware that the Tariff Board, which has had several major matters affecting the automotive industry referred to it, has announced that public inquiries thereon will commence at the end of September? Is he also aware that the term of office of several members of the Board, including the chairman, who has reached the retiring age, and the vice-chairman, will soon expire? As major inquiries by the board usually take a considerable time to complete, frequently a year or more, can the Minister give an assurance that the inquiry into this important matter will be conducted only by members of the board whose continuation in office is assured, so that the board will have adequate time to consider all aspects of the industry?

Senator O’SULLIVAN:
LP

– I under.stand that the Tariff Board has announced that inquiries relating to the automotive industry will commence at the end of September. The honorable senator is under a misapprehension regarding the term of office of members of the Tariff Board. There is no statutory retiring age for its members. Members of the Public Service- who are also members of the Tariff Board, cease to be members of the Public Service on reaching the statutory retiring age, but that does not automatically bring about their retirement from the Tariff Board. The honorable senator may rest assured that the Government will continue to ensure that the Tariff Board will be afforded every facility to carry on the splendid work that it has done in the past. The Tariff Board is engaged in work of great national importance which it has carried out with great credit to its members and to. the satisfaction of the Australian people:

page 8

QUESTION

DISALLOWED QUESTION

Senator AMOUR:
NEW SOUTH WALES

– Will the Leader of the Government in the Senate consult with the Prime Minister with a view to having two political prisoners released from Goulburn gaol ? I ask this question because of the view of the AttorneyGeneral that each State is responsible for the good conduct-

Senator Gorton:

– I rise to order. I ask for your ruling, Mr. President, as tor whether the Senate is competent to judge a matter that is completely within the province of the other House of this Parliament?

The PRESIDENT:

– Before intervening, I was waiting to see how far Senator Amour intended to develop his question. I consider that he has gone far enough to enable me to answer the point of order that has been raised. It is a maxim of parliamentary practice that whatever matter arises concerning either House of Parliament ought to be examined, discussed and adjudged in the House to which it relates, and not elsewhere. Redlich, in his Procedure of the House of Commons, volume LT., at page 154, states -

  1. . there is the right, inherent in each House, to exclusive cognizance of matters arising within it. This is the basis of the complete autonomy of each House in respect to its procedure. And hence are derived the special rights of the House which may be called the clasps which bind together the whole subject-matter of privilege, namely, its right in any particular case to be the sole and authoritative judge as to the existence and extent of a privilege and as to whether it has been infringed, and its further right to use its inherent power to punish, by way of sanction to the judgment at which it arrives.

For those reasons I do not propose to allow Senator Amour to continue his question.

page 8

QUESTION

ATOMIC ENERGY

Senator LAUGHT:
SOUTH AUSTRALIA

– My question is directed to the Leader of the Government in the Senate. Is it the intention of the Government to make available to honorable senators a precis or resume of the principal papers delivered at the recent Atoms for Peace Conference in Geneva? If so, what is the earliest date upon which these will be available for study by senators? Will the Minister consider making a statement on behalf of the Government at an early date in the Senate about the implications of this conference for Australia? In particular, will he deal with the reported statement of Sir John Cockroft, head of Britain’s atomic research programme, to the effect that nuclear power could bring industry and population to remote and waterless parts of Australia? If such a statement i& made by the Minister, would facilities be made available for debate on the important matter relating to the development of our north?

Senator O’SULLIVAN:
LP

– I do not know whether the Leader of the Government in the Senate is the appropriate Minister to whom such a question should be directed. I believe that the appropriate Minister is the Minister representing the Minister for External1 Affairs, or the Minister representing the Minister for Supply. I suggest that the honorable senator place his question on the noticepaper, and I shall have consideration given to the matters raised.

page 9

QUESTION

PUBLIC SERVICE

Senator BENN:
QUEENSLAND

– Has the Minister at present representing the Attorney-General discussed whether State governments can effectively grant, by legislation, long service leave to Commonwealth employees and to employees whose employment is governed by Commonwealth awards? If he has not discussed this matter with his officers, will he do so and inform me in due course of the conclusions that have been reached ?

Senator O’SULLIVAN:
LP

– My colleague, the Attorney-General, will soon be back in Australia, and I therefore ask the honorable senator to place his question on the notice-paper.

page 9

QUESTION

PROTECTION OF BALLOT-PAPERS

Senator MARRIOTT:
TASMANIA · LP

– I ask the Minister representing the Minister for the Interior whether his attention has been drawn to the fact that the non antiCommunist Labour party in New South Wales deemed it necessary to provide armed guards and other extraordinary safeguards to prevent tampering with ballot-papers during a recent important series of ballots? As it must be recognized that elections to the Australian Parliament are of greater significance than elections to which I have already referred, will the Minister urge the -Minister for the Interior to consider whether or not the open admission of the Australian Labour party that malpractice can occur, should cause more adequate precautions to be taken in the future to ensure the complete safety of ballot-papers in parliamentary elections?

Senator McLEAY:
LP

– I shall bring that matter before the Minister for the Interior and obtain from him a reply to the honorable senator’s question.

page 9

QUESTION

AIRLINE PROFITS

Senator ARMSTRONG:
NEW SOUTH WALES

– My question is directed to the Minister representing the Minister for Air. During this week, the Minister for Air revealed profits earned by airlines that are controlled by the Commonwealth. Will the Minister inform the Senate of the profits earned last year by Australian National Airways Proprietary Limited?

Senator McLEAY:
LP

– I shall be pleased to obtain the information sought by the honorable senator.

page 9

QUESTION

HEALTH AND MEDICAL SERVICES

Senator COOKE:
WESTERN AUSTRALIA

– I shall preface my question to the Minister representing the Minister for Social Services with an explanation to make the subject-matter clear to the ‘Senate. In some cases, pensioners who have become ill and have been admitted to hospitals have been deprived of Commonwealth payments or such benefits as are enjoyed by all other pensioners, such as free hospital treatment. Will the Minister make inquiries about pensioners committed to institutions and receiving hospital treatment in those institutions, and ensure that they shall be treated on the same basis as pensioners who are not in institutions, but who receive hospital treatment; that is, that they shall get free treatment, free medicine and free hospital accommodation? Will the Minister make inquiries to ascertain whether in some institutions pensioners are being charged for hospital accommodation and treatment, and if he finds that there are such cases, will he have the necessary administrative arrangements made to have such institutions registered, if they are capable of being registered, and in any case take action to allow pensioners in institutions to get hospital accommodation, medical treatment and medicine free of charge?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– No change has been made in the arrangements with regard to the pensioners about which the honorable senator has spoken, in comparison with those that existed when the last Labour government was in office. The present practice is the same as the practice adopted by the Labour party.

page 9

QUESTION

OVERSEAS TRADE

Senator PALTRIDGE:
WESTERN AUSTRALIA

– My question is directed to the Minister representing the Minister for Commerce and Agriculture. On the 31st May, I asked him a question about the possibility of an export guarantee corporation being set up which would have special regard to our trade with South-East Asia. At that time, the Minister told me that that matter was receiving Cabinet consideration. I now ask him whether a decision has been reached by Cabinet, and, if so, when a public statement can be expected on the establishment of the export corporation?

Senator McLEAY:
LP

– That matter is being dealt with by the Minister for Commerce and Agriculture, and all that I can say is that I shall be pleased to get a report from him to the effect that a statement can be made about the matter.

page 10

QUESTION

TRANSPORT CONFERENCE

Senator PEARSON:
SOUTH AUSTRALIA

– My question is directed to the Minister for Shipping and Transport. I understand that some few weeks ago in Brisbane the Minister presided over a meeting of the Commonwealth Transport Advisory .Council which was attended by State Ministers for Transport. I understand that among the subjects discussed was the advisability or otherwise of adopting a national roads policy. Oan the Minister give to the Senate any indication of any decisions reached at that conference or indicate developments that are likely to transpire in the future?

Senator McLEAY:
LP

– The Commonwealth Transport Advisory Council met in Brisbane and considered proposals made by several organizations in Australia interested in a national roads policy. Consideration was also given to the problem by State and Federal Ministers and it was agreed to hold a special conference in Melbourne on Monday, the 29th August, to consider the proposals made by such organizations. At that meeting the proposals will be considered by the various State and Federal Ministers. I point out that most of the powers under our constitutional set-up reside with the States and that this council is purely of an advisory nature. However, I believe that much useful work has already been done and that an important step forward has been taken by dealing with this problem on a national basis.

page 10

QUESTION

POSTAL DEPARTMENT

Senator COOKE:

– Is the PostmasterGeneral aware that there is decided dissatisfaction among the lower-paid members of the Australian Postal “Workers Union in Western Australia as the result of the policy of the Postmaster-General in paying to an -employee known as a conduit worker in the terms of the employment of that department a lesser rate than it pays elsewhere for equivalent work? Will the Minister see that differentiation in payment for similar classes of work is not made as between the various States in an Australia-wide department such as the Postal Department? Will he place the conduit worker in the Australian Postal Workers Union in Western Australia on the same rate as is paid to men doing the same class of work in other States? Does the Minister consider that in a Commonwealth department there should be any differentiation in payment to employees doing the same class of work and who are working under the same classification?

Senator COOPER:
CP

– I shall be pleased to bring the question to the notice of the Postmaster-General who I am quite sure will give full consideration to it and will furnish a reply on the matter as early as possible.

page 10

QUESTION

ALUMINIUM

Senator GUY:

– My question is directed to the Minister representing the Minister for Supply. Has the Minister for Supply given any consideration to the advisability of installing rolling mills to operate in connexion with the Australian Aluminium Commission’s works at Bell Bay ? Is it a fact that if rolling mills are not established at Bell Bay, the main plant for the production of ingot aluminium, costing over £10,000,000, will provide a comparatively small return for such a large investment, as ingots command a much lower price than aluminium sheets? Would the establishment of rolling mills on the site of the main plant greatly increase the revenue from the industry and provide- a sound investment?

Senator COOPER:
CP

– I shall bring the question to the notice of my colleague the

Minister for Supply, who will return to Australia very soon, and ask him to furnish a reply as early as possible.

page 11

QUESTION

BASS STRAIT STEAMERS

Senator HENTY:
TASMANIA

– Owing to the delay in the return of the Bass Strait steamer Taroona to the Tasmanian trade because its survey will not be completed until December, will the Minister for Shipping and Transport give consideration to retaining both Taroona and Moonta during the busy Christmas and New Year tourist season so that all tourists wishing to visit Tasmania during that period will be adequately catered for?

Senator McLEAY:
LP

– I shall be pleased to give consideration to that matter. I am sorry to say that when Taroona was opened up the repairs found to be necessary were much more extensive than was anticipated. Every effort is being made to speed up the survey job. The question raised by Senator Henty will receive full consideration.

page 11

QUESTION

AERODROME AT PORT AUGUSTA

Senator CRITCHLEY:

– I direct a question to the Minister representing the Minister for Civil Aviation. Will he inform the Senate which of the two statements made on behalf of the Government regarding a request for the provision of an aerodrome at Port Augusta is correct? The first of those statements was that the responsibility for the selection of a suitable site was that of the Port Augusta local authority whilst the second, which was given to the mayor of Port Augusta, was that as there was already an uptodate airport at Port Pirie the Government did not consider it necessary to provide another aerodrome in that region.

Senator McLEAY:
LP

– I am not in a position to answer that question offhand, but I am sure that the Minister for Civil Aviation has a satisfactory reply and I shall obtain it for the honorable senator as soon as possible.

page 11

QUESTION

NORTHERN TERRITORY LIQUOR ORDINANCE

Senator O’BYRNE:

– My question is directed to the Leader of the Government. I point out that recently during a visit by members of the Parliament to the Northern Territory my attention was directed to what I consider to be a very grave injustice to a member of the Royal Australian Air Force in Darwin under a Northern Territory ordinance which is in operation at the present time and which should, in all justice, be examined very closely by this Parliament which is responsible for the administration of that Territory. I ask the Leader of the Government whether he is in a position to advise the Senate whether the Government has made any move to amend the Northern Territory ordinance relating to the supply of liquor to aborigines, which has caused an obvious injustice to this member of the Royal Australian Air Force in Darwin who was sentenced to six months’ imprisonment. Has the Government considered the remarks of tho magistrate and those of the judge of the Supreme Court of the Northern Territory, Mr. Justice Kriewaldt, both of whom referred to the injustice of the ordinance and said that it had operated harshly on this member of the Royal Australian Air Force?

Senator O’SULLIVAN:
LP

– I think that the honorable senator will agree with me that the subject-matter raised can hardly be correctly canvassed in this chamber. I understand that the facts have been placed before the Government, hut that is all I am prepared to say at this stage.

page 11

QUESTION

COMMONWEALTH BANKING PREMISES

Senator PALTRIDGE:

asked the Minister representing the Treasurer, upon notice -

  1. What amount has (a) the Commonwealth Bank, and (6) the Commonwealth Savings Bank spent upon the construction and extension of banking premises in each of the last four financial years?
  2. What is the amount proposed to be spent by each bank in the current year and in the year 1955-50?
  3. Should the Treasurer encounter any hesitancy or reluctance by the banks to furnish this information, will he press the request, pointing out that recently the Commonwealth Bank, of its own volition, made a public statement as to some of the work it proposes to carry out in Western Australia and publicly stated the amount such work is estimated to cost.
Senator SPOONER:
LP

– The Treasurer has supplied the following answer to the honorable senator’s questions: -

I have asked the Commonwealth Bank and the Commonwealth Savings Bank for advice on the matters referred to by the honorable senator, and shall furnish a further reply when this advice is to hand.

page 12

QUESTION

MONA VALE MILITARY ROAD

Senator HENTY:

asked the Minister representing the Minister for the Army, upon notice -

  1. Is the Minister aware of the shocking condition of the road leading to the permanent military camp site at Mona Vale. Tasmania ?
  2. Is it a fact that this road also serve* a ‘number of rural properties, the valuable farm machinery of which is being subjected to greatly increased wear and tear by the deplorable condition of the road surface?
  3. As the increased mechanization of the Army is largely responsible for this deterioration, will the Minister direct the military authorities in Tasmania to confer with the Municipal Council of Boss with a view to making an adequate contribution towards the cost of reconstructing and sealing this road?
Senator SPOONER:
LP

– The Minister for the Army has furnished the following replies to the honorable senator’s questions : - 1 and 2. The matter has been examined, out the report the Minister has received does not confirm the views set out by the honorable senator in. regard to the condition of the road. The heaviest vehicle using the road is a three-ton truck and no tracked vehicle is used. Army traffic on the road does not exceed 20 per cent, of the total traffic.

  1. With the exception of the two and a half miles crf the Mona Vale road, which is recognized as a road of access to the Kermode explosive depot and towards which the Commonwealth has contributed annually for portion of the maintenance since 1948, the reconstruction and sealing of this road is a matter for consideration by the local municipal council. The council could., if it so wishes, make representations to the State Government for an allocation of Commonwealth Aid Roads moneys.

page 12

QUESTION

ROADS AND PETROL TAX

Senator HENTY:

asked the Minister representing the Treasurer, upon notice -

  1. Is it a fact that municipalities in Tasmania only received the following amounts of petrol tax allocation from the Tasmanian Government: - 1949-50, f 77,500 out of a total of f 442,000 received from the Commonwealth; 1950-51, £80,920 out of a total of £042,000 received from the Commonwealth; 1951-52, £85,749 out of a total of £739,000 received from the- Commonwealth; 1952-53, £95,951 out of a total of £746,000 received from the Commonwealth; 1953-54, £87,706 out of a total oi £831,000 received from the Commonwealth?
  2. As lack of financial support has led to serious deterioration of rural roads in Tas mania, will the Treasurer give consideration to making it a condition of the grant to Tasmania for the next five years that 50 per cent, of the petrol tax be allotted to municipal councils, of which 40 per cent, must be spent on the reconstruction of rural municipal road and 10 per cent, on city streets?
  3. Will the Government give consideration to allocating the total revenues from petrol tax for the next five years to the States to enable the important and urgent work of road construction to be promptly undertaken?
Senator SPOONER:
LP

– The Treasure) has supplied the following information in reply to the honorable senator’s questions :-

  1. On the basis of information contained in reports of the State Auditor-General it appears that, in each of these years, the State Government distributed from the petrol tax allocations which it received from the Commonwealth, the following grants to municipalities in Tasmania: -

In addition to these direct grants to municipalities for the maintenance of roads, it appears that the State Government also used portion of the Commonwealth Aid Roads payments to finance reconstruction of councils’ roads and to carry out work on bridges on country roads.

  1. As responsibility for local authority matters rests with the State Government, it is not proposed to introduce a condition of this kind. It is expressly provided in the Commonwealth Aid Roads legislation, however, that the State governments are free to pass on Commonwealth Aid Roads moneys to their associated local authorities for roads purpose*5.
  2. This subject was listed by the States for discussion at the last Premiers Conference.

page 12

QUESTION

PETROL

Senator HENTY:

asked the Minister representing the Treasurer, upon notice -

  1. ls any record kept of the consumption of petrol in each State to enable the total contribution made by each State to the petrol tax on the present basis of 7d. a gallon to be known ?
  2. If so, will the Treasurer supply the details for the period the 1st July, 1954, to 31st March, 1955?
Senator SPOONER:
LP

– The Treasurer has supplied the following replies to the honorable senator’s questions: - 1 and 2. No record is kept of the consumption of petrol in each State. Figures are available showing the clearances of petrol from bond in cadi State and the customs and excise revenues collected in respect of such petrol in each State. As, however, petrol cleared from bond in any State may be consumed in another State, these figures do not purport to indicate the actual consumption of petrol as between States.

Sitting suspended from b-.lS to 8.8 p.m.

page 13

QUESTION

ESTIMATES AND BUDGET PAPERS 1955-56

Senator SPOONER:
Minister for National Development · New South Wales · LP

– I lay on the table the following papers : -

Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works, and other Services involving Capital Expenditure, for the year ending the 30th June, 1950;

The Budget 1955-56 - Papers presented by the Sight Honorable Sir Arthur Fadden in connexion with the Budget of 1955-56 ; and

National Income and Expenditure 1954-55. and move -

Tl at the papers be printed.

The Treasurer (Sir Arthur Fadden) is now delivering in another place his budget speech for 1955-56. Copies of the Treasurer’s speech will shortly be available to honorable senators. Meanwhile, I should like to bring to the notice of .honorable senators some of the main features of the budget and of the economic context within which it has been framed.

For several years past Australia has enjoyed substantial and increasing prosperity. Throughout last financial year, the run of good times continued unbroken. Total employment rose by 83,000 to record heights. National income was £191,000,000, or 5 per cent, greater than the year before. Output improved further. Spending on consumer goods and services was 9 per cent, higher than in the previous year and high profits were made by many businesses. At the same time, the year 1954-55 brought gathering signs of strain in the economy. Labour shortages became general and, in some fields, acute. Wages and other elements in costs began to rise again and this led to upward pressure on prices. The deficit in our external trade widened rapidly and our overseas exchange reserves ran down. By the end of the financial year there were unmistakable signs of active inflation.

It is still a mild form of inflation if compared with our experience in the period up to 1952. The rise in costs and prices has not yet gone very far, and although there have been some minor and local shortages, supplies have been more or less sufficient, whilst in some quarters it appears that stocks have actually increased. Nevertheless, once the costprice spiral begins it tends to accelerate and then it becomes very difficult to halt. If there have so far been no major shortages, that is only because we have been importing much more heavily from abroad than our overseas earnings can justify.

During 1954-55 the cost of imports, including freight, exceeded the value of exports by £173,000,000. When net payments abroad for other items such as interest and dividends are included there was a deficit on current account of no less than £256,000,000. After allowing for various loans and other capital transactions, the net deficiency on the whole of our external transactions for the year was £142,000,000 and this was the extent to which our international reserves were reduced. At the 30th June last those reserves stood at £428,000,000.

Exports, it is true, were £49,000,000 less than in the previous year, but total export income was still £763,000,000 which is quite a good level of income by comparison with most earlier years. The main cause of the deterioration in the balance of payments was the rise in imports which, on an f.o.b. basis, reached £846,000,000 as compared with £683,000,000 in 1953-54. Thus imports cost an additional £163,000,000 or £184,000,000 if freight is included, and this despite the fact that throughout the whole year a considerable part of our imports were under strict licensing control. If restrictions had not applied the rise in imports would of course have been much larger.

The great rise in the demand for imports is a clear indication of the trend within the economy, and it confirms what other indicators have suggested. For some time past, something of a boom has been getting under way, a boom chiefly in consumer spending and in private investment. Personal spending on goods and services rose last year by £268,000,000, or 9 per cent., whilst it is estimated that expenditure on capital equipment was £108,000,000, or 15 per cent., greater than in 1953-54. These increases followed upon large increases in the previous year. There have been, as we all know, some great industrial projects in train, such as the oil refinery programmes and extensions of the iron and steel mills. Homebuilding has been running at a high level - about 75,000 houses a year. The most conspicuous growth, however, has been in purchases of motor vehicles, particularly cars, and in commercial and industrial buildings. Purchases of motor vehicles rose from 15,000 a month in 1953-54 to an average of 19,200 a month last year, an increase of 28 per cent., while expenditure on commercial and industrial buildings rose by 25 per cent.

On the other hand, expenditure on public works has been relatively stable during recent years. Last year it rose by £15,000,000 but that should be compared with the increase of £108,000,000 in private capital expenditure. Similarly, public expenditure as a whole remained stable until a year ago; but during 1.954-55 it rose appreciably, so adding in its own field to the demand for goods and services.

In the main, however, the expansion has occurred on the side of private expenditure. During the past two years the annual rate of expenditure on personal consumption and private investment, taken together, has increased by some £760,000,000. This upsurge of spending has been facilitated by a large expansion of credit on the part of the banking system, together with the rapid growth of hire purchase finance.

Herein lies the chief reason for the tensions and pressures in our economy that will, unless corrected, produce open inflation. Demand has thrust ahead much too fast for the growth of our resources, and so there are, on the one hand, labour shortages and rising costs and, on the other hand, excessive pressure to obtain supplies from overseas.

Views differ as to the responsibilities of a government in a situation of this kind. Some would say that the Government should intervene to control the economy and its workings through whatever powers and devices it may possess. The Government does not share this view. There is another course a government can take. Its operations are, in the aggregate, very large and they pervade every section of the economy. According to the bias it gives to those operations, they will influence the general trend of the economy one way or the other. Thus, for several years past, the steady policy of the Government has been to keep a firm hand on the public sector of the economy. It has endeavoured to prevent public expenditure from rising unduly and it has sought in particular to maintain a stable, though adequate, rate of spending on public works.

By this policy the Government has kept to a minimum the additional calls made by the public sector upon the available resources of the economy. It has done this with the conscious object of providing a counter-balance in a time when rapid expansion was going on elsewhere. Concurrently, the Government has ensured that the whole of its commitments have been met from current receipts, so that its operations have made no net additions to the spending power of the community. As and when additional revenue and other resources became available, the Government has reduced taxation, step by step, and the burden of taxation is now substantially lighter than it was before the Government took office.

If this broad policy of restraint and careful husbanding of resources has been justified in the years just past, it must be doubly justified under present circumstances. This means that the demands on resources to be made by the Government should be kept down to absolute bedrock. Some increases in expenditure are, no doubt, inescapable. There is an obligation, for example, to assist civil and war pensioners and to make some contribution also to the increasing needs of the State governments. There can be no justification, however, for embarking on new forms of expenditure and the most searching economy must be practised over the whole field of expenditures already established.

The need for restraint under present conditions is not confined to public authorities alone. Obviously, such restraining influence as government policy can exert will easily be overborne if the private sector continues on a headlong expansive course. The current need is for restraint on the part of the banking system, on the part of business, on the part of every one who has money to spend.

This is not to say that plans should be abandoned or that enterprise should be throttled back, but simply that, by common consent, the things which we are all trying to do should be brought within the compass of our practical capacity for doing them. In the very broadest terms we confront to-day, in yet another of its ever-varying forms, the problem of preserving stability in our economy.

A somewhat higher level of employment this year and a considerably higher level of earnings will benefit income tax collections from pay-as-you-earn instalments. On the other hand, the lower rates of tax introduced in last year’s budget will this year apply for a full twelve months. Primary producers’ incomes were lower last year and this, together with the reduction in tax rates, will reduce the revenue from that source. Business and professional incomes, on the other hand, were substantially higher. Companies, again, had a good year in 1954-55 and revenue will benefit accordingly. After taking these various factors into account, income tax collections in 1955-56 are estimated at £577,000,000 or £44,000,000 more than last year.

The import restrictions imposed last April will tend to reduce customs revenue, whilst less refined petrol is now being imported. Customs revenue is, therefore, estimated to fall by £13,000,000.

A further increase is expected in 1955-56 in the consumption of beer, tobacco and cigarettes. The output of locally refined petrol subject to excise will also be greater. A rise of £16,000,000 is, therefore, expected in excise revenue.

Sales tax is estimated at £106,000,000, which is approximately £5,500,000 above last year, whilst receipts from pay-roll tax are expected to increase by £5,000,000.

Total revenue from taxation is estimated at £988,500,000, which represents an increase of £58,000,000 over revenue last year.

Miscellaneous revenue is expected to fall this year by £9,000,000, the chief reason being that last year £8,200,000 was transferred from surplus balances of certain trust accounts. Post Office revenue is expected to rise by nearly £6,000,000.

Total revenue from all sources in 1955-56 is estimated at £1,114,775,000, an amount greater than last year’s revenue by some £56,000,000.

Actual cash expenditure on defence last year was £177,500,000, a short-fall of £22,500,000 on the original budget estimate. The man-power and supply difficulties which caused the lag in spending last year will doubtless continue to prevail, at least for the time being. Every effort is being made, however, to build up the strength of the services and to push on with defence projects, and the Government has, therefore, decided to provide a total amount of £190,000,000 in the budget for defence.

The Government proposes to increase war and service pensions and certain other repatriation benefits. The special rate war pension for cases of total and permanent incapacity will be increased by 10s. a week, making the pension £9 15s. a week; the 100 per cent, general rate war pension will be increased by 5s. a week, with proportionate increases for pensioners in receipt of a partial general rate pension ; and the service pension will be increased by 10s. a week to £4 a week. Similarly, war widows’ pensions will be increased by 10s. to £4 10s. a week. This increase will apply both to those war widows who receive a domestic allowance in addition to a war pension, and to those widows, of whom there are about 2,000, who are not eligible to receive a domestic allowance. The Government has also decided to remove entirely the “ceiling limits “ on the amount of service pension which may be received by a person in addition to a war pension.

The new rates will be paid from the first pension pay-day after the necessary legislation has been passed. It is estimated that these and certain minor proposals will involve an additional expenditure of £2,337,000 in a full year and £1,753,000 in 1955-56.

Age and invalid pensions will he increased by 10s. a week to a new maximum of £4 a week. The same increase will be granted in widows’ pensions, so raising the pension for widows who have one or more children to £4 5s. a week, and for other classes of widows to £3 7s. 6d. a week.

The maximum permissible income, inclusive of pension, will thus rise from £7 to £7 10s. a week for a single pensioner, and from £14 to £15 a week for a married couple. There will be a corresponding increase in the maximum permissible income, inclusive of pension, for all classes of widow pensioners.

Allowances payable to single and married sufferers from tuberculosis will be increased by 10s. a week to £6 2s. 6d. and £9 12s. 6d. a week respectively.

These pension increases will become payable on the first pension pay-day after the amending legislation is passed.

In addition to the other repatriation benefits already mentioned, the Government proposes to remove the ceiling limits on the total amount which may be received by way of age, invalid or widows’ pension in addition to a war pension.

The increases in rates I have just mentioned are expected to cost £14,933,000 for a full year and £11,200,000 this year. After taking into account the normal growth in the numbers of social service beneficiaries, the expansion of national health services and the making of five quarterly payments of child endowment this year, the total outlay from the National Welfare Fund is expected to reach £218,000,000, which is £29,000,000 more than actual expenditure last year.

Total payments to the States this year are estimated at £220,000,000, ‘ or £21.000,000 more than last year. The Government proposes again this year to pay the States a special financial assistance grant, sufficient to bring the total tax reimbursement payments for the year to £157,000,000, or £7,000,000 more than last year. This includes a special pay-‘ ment of £2,000.000 to New South Wales in recognition of the special needs of that State arising from extensive flood damage.

Special grants to the States of South Australia, Western Australia and Tasmania will amount to £18,500,000, or £6,200,000 more than last year. This follows the recommendations of the Commonwealth Grants Commission.

Payments under the new Commonwealth Aid Roads legislation, which was introduced last year, are estimated at £26,500,000. An amount of £22,360,000 was provided from Consolidated Revenue for this purpose last year.

This year, provision is being made for the first time for Commonwealth financial assistance towards the capital expenditure incurred by the States on mental institutions. An amount of £1,000,000 has been included in the estimates for this purpose.

The estimates for capital works and services this year amount to £104,000,000, compared with an appropriation last year of £104,633,000 and actual expenditure of £95,676,000. The estimate of expenditure on the Snowy Mountains scheme is £14,600,000, compared with expenditure last year of £13,200,000. Total expenditure on post office works and equipment is estimated at £30,069,000, as compared with actual expenditure of £25,839,000 in 1954-55’.

Departmental expenditure is estimated at £50,532,000, an increase of £945,000 over last year. Expenditure of the business undertakings is expected to rise by £7,873,000, including £7,019,000 provided for the post office.

The estimate for ordinary services in the territories is £15,090,000, compared with actual expenditure of £12,971,000 in 1954-55. This provides for an increase of £1,622,000 in the grant to the administration of Papua and New Guinea.

Expenditure on bounties and subsidies is expected to fall by £4,279,000. The main savings relate to the tea subsidy and the dairy products bounty.

An estimated increase of £1,523,000 in expenditure on immigration reflects the higher immigration target of 125,000 adopted for the current year.

The amount provided for international development and relief is £5,500,000, compared with actual expenditure last year of £3,429,000. Expenditure this year under the Colombo plan is expected to total £4,890,000.

The estimates of expenditure which I have just given relate to items ordinarilycharged to the Consolidated Revenue Fund. These estimates amount to £1,066,105,000, as compared with total estimated revenue of £1,114,775,000. There would thus be an apparent excess of revenue over expenditure in the Consolidated Revenue Fund - traditionally called the budget - amounting to £48,670,000.

There are, however, a number of other items of Commonwealth expenditure not regularly charged to Consolidated Revenue for which finance will have to be provided. These include £8,500,000 for war service land settlement, £8,000,000 for redemption of savings certificates, and £3,500,000 for emergency wheat storage.

Besides these items, there is an indeterminate but potentially quite large commitment to assist the State works and housing programmes for 1955-56 from Commonwealth resources. The borrowing programme for State works and housing programmes amounts to £190,000,000 and the Commonwealth has undertaken to make advances on that basis for the first six months, arrangements for the rest of the year to be determined thereafter. “We have in sight some £20,000,000 from the International Bank, but for the rest, it depends on what we can borrow either overseas - at best a minor sum - or on the local market, and there the amount is much more likely to be under than over the £123,000,000 we raised last year.

In practical terms, the finance to meet these other Commonwealth expenditures and to provide assistance for the Loan Council programme could come only from one of two sources. It could come from central bank credit against the issue of treasury bills. I mention that source only to dismiss it as unthinkable under present circumstances. The other source is the budget, and it is plain that this is the only practicable source. If we are to be in a position to meet these commitments as and when they occur, then we must make provision now for doing so. If we are to regard ourselves as covering our potential requirements, then we must, in all honesty, appropriate for the purpose such as a sum as we now believe will be needed.

That, in effect, is what the Government proposes to do. It will appropriate an amount of £48,500,000 from the Consolidated Revenue Fund to a trust account to be named the Loan Consolidation and Investment Reserve. Legislation will be brought down later in the sessional period to establish this trust account and define its purposes. The amount so appropriated to the reserve will be available there as a source of funds for the Commonwealth items of expenditure I have mentioned, such as war service land settlement. Investments will also be made from the reserve in loans to assist the Loan Council programme. After this appropriation has been made, there will remain a small surplus in Consolidated Revenue of £170,000.

It is clear from the foregoing that the budget for this year offers no scope for tax reductions. In any case, even if tax reductions were possible, it would not be in the best interest of the economy, under prevailing economic conditions, to make them. Tax reductions would add to current spending power and there is already a spending boom in progress. Similarly, tax concessions of certain kinds would give a further stimulus to investment, which is already making demands upon available labour and materials greater than can be fulfilled.

It is primarily from this stand-point that the Government has had to consider the question of allowances for depreciation under the income tax law. The Commonwealth Committee on Rates of Depreciation has produced a most able report containing recommendations which have gained a very wide measure of support. The cost of the recommendations, in terms of revenue foregone, is estimated to be something approaching £40,000,000 a year on current levels of investment and rates of taxation. Although the main revenue effect would not be felt until some time later, the economic impact of the proposals would be immediate. The Government has, therefore, had to consider the possible impact upon the economy of a major move on depreciation at this juncture

As it is clearly evident that investment in plant, buildings and the like is at present running at levels too high for general stability, the Government has decided that the wisest course would be to defer action on depreciation at this stage.

I began by saying that, for several years - past, Australia has enjoyed substantial and increasing prosperity. I have since traversed the problems which now beset us and I have indicated the broad course of policy and action which the Government believes must be followed if these problems are to be overcome. Let me sum it all up by saying briefly that the main task before us is to hold our prosperity and to ensure that our prosperity will not be thrown away in the pursuit of short-term policies of greater superficial attractiveness.

Debate (on motion by Senator McKenna) adjourned.

page 18

SPECIAL ADJOURNMENT

Motion (by Senator O’sullivan) agreed to -

That the Senate, at its rising, adjourn till 3 p.m. on Wednesday, the 7th September next, unless sooner called together by the President by telegram or letter.

Senate adjourned at 8.40 p.m.

Cite as: Australia, Senate, Debates, 24 August 1955, viewed 22 October 2017, <http://historichansard.net/senate/1955/19550824_senate_21_s6/>.

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